Visions of India: Sify’s spiffy idea

The Tech Chronicle’s Al Saracevic is spending a few days in India, checking in on the world’s fastest-growing technology economy.

Chennai, India — Spent the other day at the Chennai headquarters of Sify, a massive Indian Internet company that’s been struggling of late.

At first glance, the company has everything going for it. It’s one of the leading ISPs in a country of 1.1 billion people. It runs a chain of 3,500 cyber cafes that remain the people’s most popular choice when getting online. And it’s also one of India’s leading data-hosting companies, working with some of the industry’s biggest names at home and abroad.

Chronicle/Al Saracevic

Sify CEO and Chairman Raju Vegesna, left, and his management team were all smiles about their future tracks…

One would think they’d be rolling in the rupees. Not exactly. Sify turned a profit the last three quarters, but its Nasdaq-listed stock is treading water below $10 a share and people are wondering whether CEO Raju Vegesna — a chip-industry veteran who took the reins at Sify last summer — can turn things around.

From what I saw during my visit, Vegesna — who spends half the year living in San Jose — has all the tools he needs to bring Sify back: strong management, a good vision and a marketplace that should be exploding.

It’s that last part that might be its biggest obstacle. Internet use is surprisingly low in India. As it stands, less than 40 million of its billion-plus residents go online regularly. Despite groundbreaking fixed-wireless technology that covers entire metropolitan areas with connectivity, Sify is struggling to expand its customer base.

But like many good stories, this one might deliver a deliciously ironic ending. Get this: India’s leading Internet provider — one of the country’s leading tech companies overall — could very well find an unlikely savior in the old economy business of railroads. To find out how, click here…

During the briefing I attended Sify HQ, company officials detailed plans they have to roll out a new service that will allow Indian citizens to buy train tickets online. You might be yawning, but the Indian rail system is not your average train set.

It’s also the bane of many an Indian’s existance. People regularly wait in line two to three hours to get tickets at major urban train stations. And if the ticket you want isn’t available, you have to start over. Often, people finally get to the counter only to be turned away or refused a ticket.

Starting Saturday, Indians will be able to go to one of Sify’s 3,500 cyber cafes around the country and buy tickets online. (Or, if they are one of the 210,000 home broadband subscribers, they can do it at home on railroad’s site.) But since most Indians don’t really use the Net, Sify is banking that they’d much rather go to one of the company’s iWay cyber cafes, pay cash to have an agent book them a ticket online, and avoid the nasty long queues.

I’d keep an eye on their revenue this spring to see if this doesn’t add to the top line. The train gambit might not put Sify in Google’s league, but it’s a good example of how a savvy company can find a way to leverage the Net even if a lot of people are afraid to use it. It’s a great example of how the Internet can facilitate daily life, even in a undeveloped nation like India. Vegesna calls it his “assisted Internet” plan, which also includes methods for people to pay their utility bills at the local iWay. In many ways, these kind of grassroots efforts look to be the best way of turning on this huge population to the Internet’s potential.